Poker Players Push IRS to Delay New Loss Deduction Rule

Poker players unite against the IRS tax change

At a public IRS hearing, poker players, tax professionals, lobbyists, and recreational gamblers showed up with a remarkably unified message: the new gambling tax rule should be reconsidered, delayed, or clarified before it goes into effect.

According to the hearing coverage, ten of the dozen scheduled speakers actually appeared, and every one of them opposed the change. That kind of unanimous pushback is unusual in poker and gaming policy, where interests often split between recreational players, professionals, tax specialists, and industry advocates.

For everyday players, the issue is not theoretical. A rule like this can affect how much of a tournament score is actually taxable, how sessions are reported, and whether playing in poker rooms or traveling between live events remains financially sensible.

The core complaint: taxing “phantom income”

The central argument against the rule is that it may tax income that does not truly exist in an economic sense. In poker, that matters a great deal because results swing wildly over short and medium sample sizes.

A player can book a few big wins, report them honestly, and still end the year down once buy-ins, rake, travel, and other expenses are counted. Critics say the IRS change ignores that reality and effectively taxes volume instead of profit.

That is why the hearing drew strong statements from multiple voices in the poker world. The concern is not just about dollars owed today; it is about whether the tax code is creating bad incentives for future reporting behavior.

Dina Titus, Sara O’Connor, and Todd Witteles take aim

U.S. Rep. Dina Titus of Nevada argued that the change taxes phantom income, clashes with sound tax policy, and unfairly burdens both professionals and casual players.

Poker author and journalist Sara O’Connor said the new law punishes volume and honesty. Her point was simple but important: if the system penalizes players for accurately reporting winnings, it may encourage underreporting instead of compliance.

Todd Witteles, founder of Poker Fraud Alert, urged the IRS to postpone implementation so there would be more time to study the consequences and keep repeal efforts alive. He also raised a practical question that matters to professionals: can poker players fully deduct business expenses, rake, and buy-ins, or are those costs being squeezed by a separate limitation that makes no sense for expenses?

For players who want to sharpen their financial and technical edge, structured learning at a poker school often goes hand in hand with understanding bankroll management and tax discipline.

Other voices at the hearing and why they matter

The hearing also featured Mike Vanaki of the American Gaming Association, Gary Kondler of Kondler & Associates, and James Cloutier, identified as a poker player and a recent RunGood Poker Series Pennsylvania winner.

Longtime poker pro and commentator Katie Stone added one of the most striking personal perspectives. She told the hearing that she and her family left the United States in 2011 after Black Friday.

That detail underscores a bigger point: tax and regulatory policy can shape where poker talent lives, works, and competes. Rules are not just paperwork — they can influence migration, liquidity, and the attractiveness of the U.S. market versus alternatives such as poker clubs or offshore-friendly environments.

Expert analysis: what this means for players and the market

From an industry standpoint, this is about more than one deduction rule. It is about whether poker is treated as a business-like activity with real operating costs or as a simplified gambling category where short-term variance gets mistaken for income.

If the rule stands, several outcomes are possible:

• professionals may reduce volume or relocate;
• recreational players may become less willing to report accurately;
• online and live ecosystems could feel additional pressure;
• the U.S. market may look less competitive compared with friendlier jurisdictions.

Players who work through a poker agent, grind live events, or chase promotions & bonuses are all affected by the same reality: tax friction changes EV. It does not just reduce net profit; it can alter where and how players choose to compete.

The strategic takeaway is clear. Serious players should keep detailed records of buy-ins, cashes, rake, travel, and other deductible costs. In a high-variance game like poker, clean bookkeeping is not optional — it is part of long-term survival.

Why Congress is the real battleground

One key point from the hearing is procedural, but crucial: the IRS does not have the authority to repeal the rule. Its job is to implement it.

That means any effort to undo the change must run through Congress, not the agency that hosted the hearing. A delay would give opponents more time to build political momentum and keep the legislative fight alive.

For players, that means the next phase will be decided less by the hearing itself and more by whether lawmakers are willing to revisit the policy before it becomes entrenched.

Bottom line for poker players

The hearing showed broad and organized resistance to the new gambling loss deduction rule. The message from the poker community was consistent: taxing non-existent profit is bad policy, bad economics, and bad for compliance.

If the rule is delayed, there is still room for a more practical fix. If it is not, players may need to adapt their reporting, accounting, and game selection strategies quickly. Either way, this is a major regulatory issue that could shape the poker landscape for years.

FAQ